Just before March 1913, Logan (plaintiff) owned 250 shares of Andrews & Hitchcock Iron Company’s (Andrews’) 4,000 outstanding shares. Andrews in turn held 12 percent of the stock of Mahoning Ore & Steel Company (Mahoning Ore). In 1895, Mahoning Ore entered a 97-year lease entitling it to mine large quantities of ore. Mahoning Ore was free to mine as little or as much as it desired in any given year. Under a shareholder’s agreement, Mahoning Ore was required to distribute extracted ore among the shareholders in proportion to their holdings. In 1916, Youngstown Sheet & Tube Company (Youngstown) acquired Andrews, thereby acquiring the right to receive extracted ore from Mahoning Company. In return for Logan’s 250 shares, Youngstown paid Logan $137,500. Youngstown also agreed to pay Logan 60 cents for every ton of ore received by Youngstown from Mahoning annually and attributable to Logan’s 250 shares. In 1917, Logan’s mother, who had held 1,100 shares in Andrews and was also entitled to annual payments from Youngstown, passed away. She left her right to half of all future payments from Youngstown to Logan. The bequest was valued, for estate tax purposes, at $277,164.50. From 1917–1920, Youngstown paid Logan a total of $35,589.80 arising from Logan’s sale of her 250 shares. Logan also received $19,790.10 in 1919 and $11,977.49 in 1920, arising from her mother’s bequest. In her income tax returns for 1918, 1919, and 1920, Logan did not include any of her receipts from Youngstown. She believed that the amounts she had received until that time were recovery of capital. In regards to the 250 shares Logan sold, she believed that until she received an amount equaling her adjusted basis in the shares, any income was a return of her investment and not taxable as income. In regards to her mother’s bequest, Logan believed that until she received an amount equal to the appraised value of her mother’s bequest, her receipt of income from her mother’s bequest was also non-taxable as income. As of 1920, Logan’s adjusted basis in the 250 shares exceeded the $173,089.80 that she received from the sale. Furthermore, the value of her mother’s bequest exceeded the payments received from the bequest. The Commissioner (defendant) held that the fair market value of Youngstown’s obligation to pay 60 cents per ton was ascertainable in 1916 and that upon sale, a closed transaction had occurred resulting in no profit for Logan in 1916. He then apportioned Logan’s subsequent receipts between income and return of capital. He assessed deficiencies against Logan accordingly. The Board of Tax Appeals affirmed. The Court of Appeals reversed, holding that it was impossible to ascertain the fair market value of Youngstown’s obligation in 1916 and that Logan was entitled to first receive a return of her capital and the value of her mother’s bequest before any receipts were taxable as income. Because this had not yet occurred, Logan’s annual receipts were not taxable as income.